Approaches to establishing central bank credibility include
A)inflation targeting.
B)nominal GDP targeting.
C)central bank independence.
D)appointment of a more conservative central banker.
E)all of the above.

Question

Quizplus · Accepted Answer

All of the above options can contribute to establishing central bank credibility. Inflation targeting and nominal GDP targeting give clear goals for the central bank to work towards, increasing transparency and accountability. Central bank independence can help prevent political interference and signal a commitment to price stability. Appointing a more conservative central banker can signal a commitment to low inflation and stability in the eyes of the public and financial markets. It is important to note that the effectiveness of these approaches may vary depending on the specific country and economic conditions.

Approaches to Establishing Central Bank Credibility Include